In a judgment dated October 27, 2017, Madam Justice Spies of the Divisional Court dismissed an application for judicial review and injunctive relief brought by Grascan Construction Ltd. and Torbridge Construction Ltd. (the “Applicants”) against Infrastructure Ontario and Metrolinx relating to their Request for Qualifications to build and finance the Lakeshore East – East Corridor Expansion project (the “RFQ”) as part of the Government of Ontario’s Regional Express Rail initiative.
The Lakeshore East – East Corridor Expansion project consists of key infrastructure upgrades that are required to accommodate the expansion of GO Transit rail service on the Lakeshore East line. Via their request for an injunction, the Applicants sought to halt any further steps being taken by Infrastructure Ontario and Metrolinx unless the Applicants’ prequalification submissions were reconsidered.
The Applicants were disqualified from the RFQ process (the “Disqualification Decision”) for failing to provide a letter from a national accounting firm confirming that the relevant Applicant had designed appropriate internal policies, processes, and controls establishing ethical standards for its bidding practices (the “Accounting Firm Letter”). The Accounting Firm Letter requirement had been introduced to protect against unethical bidding practices and conflicts of interest. The Applicants challenged the Disqualification Decision asserting numerous complaints directed at the Accounting Firm Letter, and alleging that the Disqualification Decision constituted a breach of the duty of fairness.
Madam Justice Spies dismissed the application in its entirety and awarded costs to Infrastructure Ontario and Metrolinx. In doing so, Madam Justice Spies made a number of important findings, including the following:
- The Accounting Firm Letter requirement was not judicially reviewable;
- The Disqualification Decision was not the exercise of a statutory power of decision;
- No duty of fairness arises at the prequalification stage and the Disqualification Decision was therefore not subject to judicial review;
- Even if the Disqualification Decision were subject to judicial review, the doctrine of procedural fairness was not engaged and the Disqualification Decision must be judged on the standard of reasonableness;
- The Disqualification Decision was reasonable in all the circumstances and there was no basis to find a breach of any duty of fairness;
- The Applicants’ legitimate expectations could only have been informed by the terms of the RFQ itself, and prior RFQ processes were not relevant considerations. Fairness could not require Metrolinx and Infrastructure Ontario to consider the unique prior experiences of the Applicants (or those of other project applicants), and all that mattered was that the fair and reasonable RFQ process was followed; and
- Fairness required that the Applicants be treated the same as all other project applicants. Metrolinx, Infrastructure Ontario, and the five project applicants who had complied with the RFQ and been prequalified would all suffer prejudice if the Applicants were granted the special treatment they sought.
This decision is significant as it confirms the limited availability of judicial review in the early stages of a public procurement process, and concludes that Infrastructure Ontario and Metrolinx’s strict enforcement of the Accounting Firm Letter requirement to protect against unethical bidding practices was reasonable.
Infrastructure Ontario and Metrolinx were represented in this application for judicial review by Jed Blackburn, Chris Selby, and Arthur Hamilton, with valued support from Rob Kligman.
A copy of the reported decision can be found here.